Energy - if your energy company goes bust!
Price increases and energy suppliers going bust
If your energy company goes bust
You’ll still have gas and electricity if your energy supplier goes out of business. Take meter readings and a screenshot of any credit you have on your account.
The gas and electricity regulator, Ofgem, will move you to a new supplier. This usually takes a few weeks.
Wait for your new supplier to contact you. They’ll explain what will happen with your account. Contact your new supplier if you don’t hear from them within 2 weeks. You can check who’s taken over your energy supply if you’re not sure who your new supplier is.
Don’t switch tariff or supplier until your account is moved to the new supplier. You might find it harder to get any money you’re owed if you switch before this happens.
If your account is in credit your money is protected, unless you’re a small business customer. Your new supplier will tell you how you’ll be paid back.
What is the energy price cap?
Energy price caps (set by OFGEM energy regulator) limit the amount you can be charged by your supplier for each unit of energy you use. Energy price caps don't limit your total bill - you'll still pay more if you use more energy.
Your energy price will normally be capped if you either:
Have a prepayment meter
If you're on a default standard, variable tariff
The cap doesn’t affect people on a fixed tariff or plan. It will affect fixed tariffs or plans when they finish that tariff or plan and they revert to the default standard variable tariff.
If you're not sure if your energy price is being capped you can call your supplier to check.
Energy price cap increase
On 1 October 2021 the energy price cap increased by 12%. The increase has been caused by higher wholesale energy prices. In April 2022 there is expected to be a further increase.
This means if you are already on a standard variable tariff or have been moved to a standard variable tariff then your energy prices will almost certainly be higher.
Your options if you are on or you are put on a standard variable tariff:
Option 1: Do nothing straight away and stay on a price-capped variable tariff. The price cap will protect you in the short term, but in April 2022 when the price cap rises it will allow the standard variable tariff to rise.
Option 2: Switch to the cheapest fixed tariff available. However, suppliers generally are not offering deals below the prices cap and it is very difficult to find a favourable tariff to switch to. Also, if your energy supplier has gone bust, don’t switch tariff or supplier until your account is moved to the new supplier. You might find it harder to get any money you’re owed if you switch before this happens.
How to switch to a new supplier
Check some things before you switch like exit fees, type of meter etc
Visit Citizens Advice energy comparison site Compare gas and electricity prices
Our energy advisers can help. We offer free, impartial and confidential advice: email energyadvice@cadat.org.uk